BANKING
| Banks commit Rs 4,500 cr to Ispat's debt refinance Fri, 18 Mar 2011 01:04:00 +0530 |
| Banks have committed to refinance nearly half of the Rs 9,500-crore debt on the books of Ispat Industries, said sources. An investment banker privy to the refinancing process told Business Standard that JSW has secured commitments for Rs 4,500 crore of Ispat’s debt and the rest will be tied up by June. “JSW Steel wants to complete the debt refinancing process by June, although the company has time till September to complete the process,” he said. Another official in the know of the deal said SBI will refinance Rs 3,000-4,000 crore worth of loans. The quantum of loan committed by Bank of India (BoI) is unknown, but will be in excess of Rs 1,000 crore, he said. “Axis Bank is also in the fray and will take some exposure to the loan,” the banker said. Seshagiri Rao, joint managing director and group CFO, JSW Steel, said, “A bank like SBI and BoI is launching a transaction and unless they are convinced with the proposal, they will never launch. The same is true for any bank for that matter. So, they will also put in money, but how much we don’t know today. They have to go to their respective boards for that.” He did not specify which banks have committed how much money, but said, “SBI and BoI are syndicators and it is not an underwritten offer. I haven’t asked any underwritten offer. So, who will take how much exposure can’t be said unless it is closed.” Rao said, “We have mandated SBI and BoI for the debt refinance and the process is on. I won’t put a timeline to it, but the earlier we do, the better it is.” He said the company was able to launch the process only in February and have given two months time to the banks to go their respective boards to get the required sanctions. He said that JSW’s has good relations with banks for loan syndication and that is why the mandate to refinance has been given to SBI and BoI. Ispat owes Rs 3,000 crore to IDBI Bank Ltd, Rs 1,800 crore to ICICI Bank Ltd and Rs 1,500 crore to IFCI Ltd. Besides, it also owes Rs 1,000 crore to a group of banks. State Bank of India has a Rs 2,000-crore exposure as part of Ispat’s working capital debt. In December, JSW Steel had agreed to buy a controlling 41.3 per cent stake in Ispat Industries for Rs 2,157 crore, valuing the company at Rs 5,224 crore. JSW’s open offer for Ispat’s 20 per cent stake opened on March 17 and will close on April 5. |
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